Foot Locker 2004 Annual Report Download - page 50

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The changes in the carrying amount of intangibles subject to amortization for the year ended January 29, 2005
are as follows:
2003 Acquisitions
(1)
Additions
Amortization
/ Other
(2)
2004
Wtd.
Avg.
Useful Life
in Years
(in millions)
Finite life intangible assets
Lease acquisition costs .................... $94 $— $17 $ (9) $102 12.2
Trademark ................................ — 21 — (1) 20 20.0
Loyalty program ........................... — 1 — — 1 2.0
Favorable leases .......................... — 9 — (1) 8 4.1
Total .................................. $94 $31 $17 $(11) $131 12.6
(1) Attributable to the acquisition of 349 Footaction stores and 11 stores in the Republic of Ireland.
(2) Includes effect of foreign currency translation.
Lease acquisition costs represent amounts that are required to secure prime lease locations and other lease rights,
primarily in Europe. Included in finite life intangibles, as a result of the Footaction and Republic of Ireland purchases,
are the trademark for the Footaction name, amounts paid for leased locations with rents below their fair value for both
acquisitions and amounts paid to obtain names of members of the Footaction loyalty program.
Amortization expense for the intangibles subject to amortization was approximately $17 million, $11 million and
$8 million for 2004, 2003 and 2002, respectively. Annual estimated amortization expense for finite life intangible assets
is expected to approximate $19 million for 2005, $18 million for 2006, $16 million for 2007, $14 million for 2008 and
$13 million for 2009.
5 Segment Information
The Company has determined that its reportable segments are those that are based on its method of internal reporting.
As of January 29, 2005, the Company has two reportable segments, Athletic Stores, which sells athletic footwear and apparel
through its various retail stores, and Direct-to-Customers, which includes the Company’s catalogs and Internet business.
The accounting policies of both segments are the same as those described in the “Summary of Significant Accounting
Policies.” The Company evaluates performance based on several factors, of which the primary financial measure is division
results. Division profit reflects income from continuing operations before income taxes, corporate expense, non-operating
income and net interest expense.
Sales
2004 2003 2002
(in millions)
Athletic Stores ............................................. $4,989 $4,413 $4,160
Direct-to-Customers ........................................ 366 366 349
Total sales ................................................. $5,355 $4,779 $4,509
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